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Guidelines for Capital Market Investment in Bangladesh for Non-Resident Bangladeshis (NRBs)

This guide provides information for NRBs on how to invest in Bangladesh's capital market. It highlights the benefits of investing, the necessary accounts to open, required documents, and how to operate in the market.

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Guidelines for Capital Market Investment in Bangladesh for Non-Resident Bangladeshis (NRBs)

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  1. Guidelines for Capital Market Investment in Bangladesh for Non-Resident Bangladeshis (NRBs)

  2. Who are NRBs A Bangladeshi citizen living abroad with valid status like- • Either as foreign country’s permanent resident or with valid work permit; • In case of a foreign passport holder, an endorsement either from the relevant Bangladeshi Embassy or from Ministry of Foreign Affairs, Bangladesh stating that “No visa is required” for traveling to Bangladesh – as a proof of dual citizenship.

  3. Why should the NRBs invest in Bangladesh Capital Market? • 10% quota of all Initial Public Offerings (IPOs) are reserved for NRBs; • 100% repatriation of capital, dividend and investment profits; • Reinvestment of repatritiable dividend treated as new investment; • Can also trade in the secondary capital market while abroad through Nominee; • No tax on capital gains on individual; • Individual Income Tax assessment is similar to any other Resident Bangladeshi; • 10% tax rebate on investment allowance on security investment.

  4. How To Invest In Bangladesh Capital Market • Open a Foreign Currency (FC) Account that is needed for channeling foreign currency in as well as repatriation of earnings from investment; • Open Non-Resident Investors Taka Account (NITA) that is required for converting foreign currency into Taka; • Open a Custodian Account with any of the SEC registered Securities Custodian so that NRB & Foreign Investors may choose to appoint a Custodian to ensure trade execution and safe custody of shares; • Open Beneficiary Owners (BO) Account with any brokerage house; • Assign a Nominee/Power of Attorney (POA) – optional; • A nominee for inheritance/transmission, in case something happens to investor, is required to be assigned. Remember that this nominee and the POA may or may not be the same person.

  5. Necessary Documents for FC and NITA Account • Photocopy of Passport / Social Security Card / Resident Card etc duly attested (if you are situated in a foreign country then attestation needs to be done the respective Bangladesh Embassy or High Commission); • Passport size photographs (4 copies for account holder and 2 copies for Nominees) duly attested; • A Nominee – beneficiary in case of death of the investor. His/her signature and photo (duly attested by the investor) on the prescribed form provided by the brokerage house; • Employment certificate / trade license copy / work permit or Pay slip / tax return document as a proof of earning status of the NRB;

  6. Necessary Documents Contd. • A nominated person with POA (Power of Attorney) who will sign trading documents on behalf of the NRB while he is abroad. His/her photo (attested by the NRB) and signature in a prescribed form by the brokerage house (POA can be any adult person of legal age residing in Bangladesh); • If the broker is a bank then an extra form of KYC (Know your customer will also have to be filled); • Initial fund will have to be a cheque or pay order or other allowed form drawn from the FC account

  7. Documents required for Custodian Account • Photocopy of Passport / Social Security Card / Resident Card etc duly attested (if you are situated in a foreign country then attestation needs to be done the respective Bangladesh Embassy or High Commission) • Passport size photographs of Account Holder duly attested; • Photographs of Authorized person; • A Nominee – beneficiary in case of death of the investor. His/her signature and photo (duly attested by the investor) on the prescribed form provided by the brokerage house; • Employment certificate / trade license copy / work permit or Pay slip / tax return document as a proof of earning status of the NRB

  8. Required Document for Stock Broking and BO Accounts • Photocopy of Passport / Social Security Card / Resident Card etc duly attested (if you are situated in a foreign country then attestation needs to be done the respective Bangladesh Embassy or High Commission); • Passport size photographs of Account Holder duly attested; • Photographs of Authorized person.

  9. How to Operate • IPO application needs to be filled on a prescribed form. Such forms can be obtained through mail, website of issuing company, or through broker etc.; • Trading in secondary market is done by Buy/Sell order forms; • If POA (Nominee) is assigned then the POA need to sign the Buy/Sell order form within 24 hours of order placement; • If NRB wishes not to assign a POA then orders can be placed via phone or email (broker approval required) and then a signed Buy/Sell order form needs to be faxed to broker within 24 hours; • Trading will be carried out within prevailing market guidelines; • Shares will be credited or debited to the BO account accordingly

  10. Some Useful Link • Bangladesh Bank (https://www.bb.org.bd/) • Bangladesh Securities and Exchange Commission (http://www.sec.gov.bd/) • Dhaka Stock Exchange (https://www.dsebd.org/

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